MENA-OECD Enterprise Financing
Network
“Providing Linkages for Growth”
Dr. Alexander Böhmer, Executive Programme Manager,
MENA-OECD Investment Programme
Tel: +33 1 45 24 1912
Fax: +33 1 44 30 6135
alexander.boehmer@oecd.org
www.oecd.org/mena/investment
MENA-OECD Investment Programme
MENA-OECD Investment Programme
• The MENA-OECD Investment Programme is a regional effort,
initiated and led by countries in the Middle East and North
Africa (MENA).
• It promotes broad reforms to enhance the investment climate
and sustainable economic growth throughout the MENA
region.
• It facilitates policy dialogue and sharing of experience on
investment policies among policy makers from MENA
countries and their OECD counterparts.
“Mobilise private investment – foreign, regional and domestic –
as driving force for economic growth and employment
throughout the MENA region.”
MENA-OECD Investment Programme
MENA-OECD Enterprise Financing Network
• The MENA-OECD Enterprise Financing Network
aims to improve the regulatory conditions for financing
entrepreneurship using the MENA-OECD Investment
Programme as a forum for exchange of good practice
between MENA and OECD business and government
representatives
• The Network aims to foster entrepreneurship in the
region by:
– Creating a platform to connect entrepreneurs, financiers and
government regulators
– Providing avenues for private sector participants to effectively
input into key investment policy reforms relevant to financing
of entrepreneurship
MENA-OECD Investment Programme
MENA-OECD Enterprise Financing
Network
• The Network is wide: 18 MENA countries and OECD
member countries are supporting the MENA-OECD
Investment Programme
• The Network is deep: it provides a business and policy
network for actors including:
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Private Equity
Venture Capital
Business Angels
Associations
Business Incubators
Entrepreneurs
Government regulators (MENA and OECD countries)
Investment Promotion Agencies (MENA).
MENA-OECD Investment Programme
Actions going forward
• Continue enlarging the Enterprise Financing
Network
• Develop recommendations and action plans to
address innovative technology and regulatory issues
• Launch a report to determine the enterprise
financing gap in the MENA region
• Develop a blueprint for enterprise funds
why?
To support efforts of MENA entrepreneurs to effectively participate
in development of their economies
MENA-OECD Investment Programme
Ministerial Declaration, Jordan 14
February 2006
Sustaining efforts towards modernisation of financial systems to meet the challenge of
employment creation and technological advance by
1. “broadening the range of financial services and products that are available and
aligning supervisory practices with global standards”;
And by:
2. “developing effective frameworks and policies for entrepreneurship, including
the promotion of women’s entrepreneurship”.
MENA-OECD Investment Programme
Existing Models to Close the
Financing Gap
Selected Regional examples
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Public guarantee instruments: introduced in Egypt, Israel, Jordan, Lebanon, Morocco and Tunisia
in cooperation with their banking sectors
•
SME banks: Banque de Financement de Petites and Moyennes Enteprises (BFPME) created in
2005 in Tunisia to provide loans to local SMEs. Fondation Bank Populaire of Morocco and Bank of
Cairo in Egypt began to outsource this customers segment set up microfinance departments
within the bank.
Venture capital initiatives: In Morocco, a law regulating the venture capital sector was introduced
in 2006 in order to provide incentives for funds to invest in SMEs
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International initiatives
A number of regional initiatives established (EU Working Party on access to finance for SMEs,
IFC-PEP MENA Programme, etc.) to address the issue
•
EIB co-investing via specialised local intermediaries, direct equity participations in local
investment funds, or even in local companies.
•
Enterprise Financing Network which aims to close the financing gap by studying the exact
demands for financing in each country and gather entrepreneurs and financiers
MENA-OECD Investment Programme
Gap Study: Context and Content
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Extent of the financing gap in the MENA region is unknown
due to data limitations
EFN to undertake quantitative study on financing gap in
MENA region
Financing instruments to be considered
Obstacles in the regulatory environment in relation to creation
of start up financing mechanisms and in general conditions for
entrepreneurship will be highlighted.
Outcome: quantification of gaps (stage, sector, etc.) per
country
MENA-OECD Investment Programme
Recommendations
General
•
Address the shared responsibility for public and private sectors
and facilitate information exchange between government action and
private sector initiatives on innovative entrepreneurship and
enhancement of financing conditions;
•
Improve the collection and disseminate data related to enterprise
financing through various instruments (bank credit, fixed income
instruments, capital markets, venture capital, private equity, etc.);
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Establish linkages between financiers, namely venture capital and
private equity, business angels and science and technology
associations, entrepreneurs, and other actors in the
entrepreneurship value chain in order to bridge the financing gap;
MENA-OECD Investment Programme
Recommendations
Governments
•
Provide support to governments in the MENA region wishing to
develop instruments to bridge specific gaps to innovative
enterprises, particularly in knowledge intensive industries;
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Encourage governments to further develop capital markets in order
to facilitate Initial Public Offerings and securities issuance;
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Encourage governments to consider supporting SMEs with fiscal
and non-fiscal incentive schemes, finance guarantee programmes,
and equity participation and other financing instruments;
Encourage governments to further develop the fixed income
instruments market in order to facilitate corporate borrowing;
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MENA-OECD Investment Programme
Recommendations
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Recommend the establishment of private and public credit bureaus
in order to establish credit history and thus facilitate borrowing;
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Encourage governments to evaluate their insolvency frameworks
in order to facilitate corporate borrowing as well as issuance of debt
and equity instruments;
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Review the legal framework with respect to innovation and
financing, in particular takeover and joint venture legislation and
regulation of intellectual property with a view to facilitate domestic
and foreign investment in the financial industry;
MENA-OECD Investment Programme
Recommendations
Private sector/incubators
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Make efforts to increase the entrepreneurs’ awareness of financing
tools available to them;
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Provide training to entrepreneurs on how to formulate business
plans and present their activities to potential financiers;
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Develop a blueprint for successful enterprise funds drawing on best
practice from MENA and OECD countries;
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Consider the specific difficulties in obtaining financing which may
be faced by women entrepreneurs in the MENA region;
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Support the establishment and use of business incubators in order
to assist the commercialisation of early-stage enterprises;
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Foster linkages between universities, R&D centers, science and
technology parks, business incubators and entrepreneurs.
MENA-OECD Investment Programme
Recommendations
Enterprise Financing Network
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Support analysis undertaking by the MENA-OECD Enterprise Financing
Network on how to address the financing gap/innovation challenges in the
MENA region;
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Survey framework conditions relating to the operation of private equity and
venture capital in the MENA countries and develop recommendations;
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Participate and support the Enterprise Financing Network as a key
initiative to reduce the financing gap in the Middle East and North Africa
region.
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Encourage the establishment of a regional institute for entrepreneurial
finance to conduct research, education and professional training and
provide advice on the regulatory environment and the development of
financing instruments
MENA-OECD Investment Programme
Network Access
If you are interested in learning more
about the MENA-OECD Enterprise
Financing Network, please contact
alexander.boehmer@oecd.org.
MENA-OECD Investment Programme